# RECORD 275ef524fa6ec8255e8b2778f98bbc60cfd20e7a
# TITLE: Determining the negative effect on house values of proximity to a landfill site by means of an application of the hedonic pricing method
# YEAR: 2011.0  VENUE: nan  DOI: 10.4102/sajems.v12i2.280
# AUTHORS: M. du Preez; T. Lottering
# PAGES: 7  CANDIDATE TABLE PAGES (1-based): []
# ABSTRACT: This study applied the hedonic pricing method to determine whether a disused, solid waste landfill site has an adverse effect on the prices of low-cost houses in New Brighton, a neighbourhood of the Nelson Mandela Metropole, Eastern Cape, South Africa. The results of the study show that the landfill site has a negative effect on New Brighton house prices. The average increase in house value is R36.00 per one hundred metres from the landfill site. This increase amounts to 0.44 percent of the value of a house per 100 metres from the landfill. When the change in value is summed for all the properties in the sample area (allowing for variation in value change due to differing distances from the landfill site) the total disamenity effect of the landfill site is approximately R1.4 million.


===== PAGE 1 (score 6, numeric-paren 0, table-words 0, var-words 6) =====

256 
SAJEMS NS 12 (2009) No 2
Determining the negative effect on house values 
of proximity to a landfill site by means of an 
application of the hedonic pricing method
M du Preez
Department of Economic History, Nelson Mandela Metropolitan University
T Lottering
Aberdare Power Cables, Port Elizabeth
Abstract
This study applied the hedonic pricing method to determine whether a disused, solid waste landfill 
site has an adverse effect on the prices of low-cost houses in New Brighton, a neighbourhood of 
the Nelson Mandela Metropole, Eastern Cape, South Africa. The results of the study show that the 
landfill site has a negative effect on New Brighton house prices. The average increase in house value 
is R36.00 per one hundred metres from the landfill site. This increase amounts to 0.44 percent of 
the value of a house per 100 metres from the landfill. When the change in value is summed for all 
the properties in the sample area (allowing for variation in value change due to differing distances 
from the landfill site) the total disamenity effect of the landfill site is approximately R1.4 million.
JEL Q57
1 
Introduction
Whether, and to what degree, solid waste landfills 
have an adverse effect on residential property 
prices has received a great deal of attention 
over the years (see, for example, Bouvier, 
Halstead, Conway & Manalo, 2000; Havlicek, 
Richardson & Davies, 1971; Reichert, 1991). It 
is a well-recognised fact that the establishment 
and operation of a landfill creates negative 
externalities, which may include environmental 
damages, such as the build-up of methane gas 
and groundwater contamination (Lomberg, 
Rosewarne, Raymer & Devey, 1996; Reddy & 
Gardiner, 2003). In addition to these damages, 
the dumping of solid waste may also give rise 
to bad odors, vermin and flies, while litter may 
spread from the landfill if it is not properly 
policed (Bouvier et al., 2000). Moreover, 
covering and compacting the solid waste with 
soil creates airborne dust. As a result of these 
negative impacts, it is normal to locate landfills 
that may have a deleterious aesthetic and 
health impact on areas remote from residential 
neighbourhoods, as well as creating buffer zones 
to prevent further encroachment.
The economic impact of a landfill on the value 
of properties situated in close proximity to it is 
important for a number of reasons. First, price 
disparities between like properties, differing 
only in their distance from a landfill, provide 
information on the welfare effect on households 
situated in the vicinity (Ready, 2005). Second, 
affected property owners want to know what 
effect, if any, the presence of a landfill has or 
will have on the value of their assets. Third, in 
the event of a landfill project being subject to 
cost-benefit analysis, estimates of property price 
effects can be incorporated into the cost-benefit 
profile.
Numerous studies have been conducted to 
determine an empirical relationship between 
residential property prices and proximity to 
a solid waste landfill site (Ready, 2005). The 
hedonic pricing method, which entails drawing